Exam (elaborations)
REE 3043 Exam 3 questions with verified answers
- Course
- Institution
REE 3043 Exam 3 questions with verified answers
[Show more]
Content preview
REE 3043 Exam 3 questions with verifiedanswers
Calculate the monthly payment required to fully amortize over 30 years a
$155,000 mortgage loan, assuming the 9% annual interest rate - ✔✔(First
hit 2nd and then P/Y and enter 12 then clear to begin input)
N= 30
I= 9%
Pv=
Pmt= ?
Fv=
1247.16
The value of income-producing property depends on its expected cash flows,
the timing of those cash flows, and the riskiness of the cash flows. - ✔✔True
Real estate investors earn returns on their investments from two basic
components: income from the rental of the property and the tax
sheltering characteristics of real estate. - ✔✔False
Investment "risk" is defined as the probability that actual cash flows will
differ from what was expected. - ✔✔True
Most real estate investors are risk seekers rather than risk averse. - ✔✔false
,The outstanding balance on a mortgage loan can be calculated as the present
value of the remaining payments, discounted at the contract interest rate. -
✔✔True
The investment strategy may be separated into three components -
✔✔Investment policy, investment objectives, and investment policies
Characteristics of income property investment - ✔✔Property
Type-Apartments, hotels, office buildings etc
Rental Income
Purchase as Investors
Geographic Scope
Net sellping price NSP= - ✔✔expected sale price (SP) - selling expense (SE)
a measure of the extent to which NOI can decline before it is sufficient to service
the debt, defined as net operating income over debt service - ✔✔debt
coverage ratio
the percentage of an equity investment returned in cash, before income taxes, for
one year - ✔✔equity dividend rate
the rent that could be obtained by renting a property on the open market
- ✔✔market rent
, the rent specified in the lease contract - ✔✔contract rent
you are considering purchasing a retail building for 5,000,000 (50,000 sq. ft. net
lease area). You expect lease in the first year for $18 per sq ft. Vacancy and
collection losses are expected to be 9 percent of PGI' and operating expenses
45 percent of EGI. What is expected operating income (NOI) for the first year? -
✔✔450,450
You are considering purchasing a retail building for 5,000,000 (50,000 sq. ft. net
lease area). You expect lease in the first year for $18 per sq ft. Vacancy and
collection losses are expected to be 9 percent of PGI' and operating expenses
45 percent of EGI. Using selling price, what is the implied first year overall
capitalization rate ? - ✔✔9.0 Percent
Objective of U.S tax law - ✔✔raise revenue in an efficient and
equitable manner & promotion of economically and socially desirable
activities
Real estate is classified into four categories - ✔✔personal residence,
dealer property, trade/business property, and investment property
Forms of Ownership - ✔✔sole proprietorship, partnership, corporation
Types of Income - ✔✔active income- income earned from salaries,
wages, commissions, fees, and bonuses
portfolio income-interest and dividends, and capital gains from stock, bond, and
other financial security investment
passive activity income- generated from trade and business activities
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Examsplug. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
62890 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now